Current Trends in the Housing Market
Purchase Application Data Analysis
The recent trends in mortgage rates have raised expectations regarding the housing market. However, the week-to-week decline in purchase applications was only 5%, which is more favorable than anticipated. Additionally, year-over-year growth improved from 10% to 13%, likely reflecting the low baseline conditions currently impacting the market.
This observation is especially interesting given the sustained mortgage rates, which remain above 6%. Conversely, monthly purchase application reports from the new home sales sector indicated a significant month-to-month growth of 14% and a 5.5% increase year-over-year.
Weekly Trends
For the year 2025, the housing market has reported:
- 7 positive weekly readings
- 4 negative weekly readings
- 3 weeks with flat metrics
Pending Sales Data
According to Altos, the data for total pending contracts suggests a resilient housing demand. While mortgage rates typically need to trend closer to 6% for substantial growth, positive changes in weekly sales data indicate improving conditions. Notably, total pending sales data reflects a year-over-year increase.
Recent pending contract numbers illustrate:
- 2025: 391,488
- 2024: 384,614
- 2023: 335,017
10-Year Yield and Mortgage Rates
Forecasts for 2025 posit that mortgage rates will fluctuate between 5.75% and 7.25%, while the 10-year yield is expected to range from 3.80% to 4.70%. Recent market developments indicate a stabilization of the 10-year yield around 4.35%, coinciding with a drop in mortgage rates, which suggests easing pressures in the bond market.
Mortgage Spreads Overview
Following the banking crisis in Silicon Valley, mortgage spreads saw a significant increase in 2023. However, there has been a gradual recovery in 2024. If spreads were to return to the levels seen in 2023, mortgage rates could potentially rise to nearly 8%, creating challenges for buyers and sellers alike.
Historically, mortgage spreads are expected to fall between 1.60% and 1.80%, and their return to these levels would correlate with more favorable mortgage rates near the 6% mark.
Housing Inventory Changes
The growth of housing inventory has been a positive trend in 2024 and 2025, moving toward levels more akin to those in 2019. Weekly inventory data highlights a significant rise, marking progress towards a more balanced housing market.
Recent inventory statistics include:
- This week: Increased from 702,434 to 719,400
- Last year: Increased from 526,479 to 542,651
- All-time inventory low in 2022: 240,497
- 2024 peak: 739,434
New Listings Data
The trajectory for new listings has improved compared to the previous two years. This year, the aim is to see at least 80,000 homes listed weekly during peak seasons. Recent figures suggest momentum toward this goal, as approximately 70% to 80% of sellers and buyers engage in the market.
Last week’s new listing data shows:
- 2025: 77,004
- 2024: 68,409
- 2023: 59,269
Price Adjustments in the Market
With rising inventory levels and steady mortgage rates, an increase in price adjustments is currently observed. While prices may modestly increase by approximately 1.77% this year, expectations suggest that real home price growth may remain negative, contingent on fluctuating mortgage rates.
Recent percentages of price cuts are:
- 2025: 35.5%
- 2024: 32%
- 2023: 30%
Looking Ahead: Economic Indicators and Market Trends
In the upcoming week, discussions from several Federal Reserve presidents are anticipated, potentially influencing market sentiment. Furthermore, reports on new and existing home sales will be released, providing insight into the housing market’s continued trajectory.
These upcoming statistics will be closely monitored, especially given previous trends and shifts in consumer sentiment.